Bank seeks to form a holding company

HENDERSON, Ky. - The Bank of Henderson is seeking permission from the Federal Reserve System to form a bank holding company, according to a legal notice in The Gleaner today.

Adopting that type of corporate structure "has many purposes," including giving the bank greater flexibility to offer other financial services, President Dale Sights said Wednesday.

"All of our competition operates under that ownership structure," he said. "We've had some growth. It was time to do it before we got bigger."

The bank reported assets of $63.6 million as of Dec. 31, 2009, up nearly $14 million or 27 percent from one year earlier.

Approximately 84 percent of commercial banks in the U.S. are part of a holding company, according to the Federal Reserve.

"The main reason that's used is if the bank wants to operate an affiliated company, such as (an) insurance (agency)," according to Chris Cole, senior regulatory counsel for Independent Community Bankers of America, a Washington, D.C.-based trade association.

A bank holding company also has greater flexibility in raising capital taking on debt and acquiring other banks, according to a Federal Reserve Web site.

This month, the Bank of Henderson's board of directors has incorporated a new company, Soteria Financial Group Inc., to serve as the bank's holding company.

But Sights said the Bank of Henderson would retain its existing name.

Soteria "was the Greek goddess of strength and stability," Sights said. "We were searching for an unusual name with no geographical restrictions," although the name "will only be for the holding company."

The directors of Soteria are the same as those of the Bank of Henderson, according to the legal notice. The directors include Sights, Dr. Fred L. Barnett, Tommy Dempewolf, William S. Latta and Dr. Thomas B. Logan, all of Henderson, and Rahmi Soyugenc of Evansville.

If the holding company formation is approved, Soteria will acquire 100 percent of the Bank of Henderson. But the ultimate owners will remain the same, because the bank's shareholders will own the same number of Soteria shares as they do bank shares, according to Sights.

"It's a share-for-share exchange," he said.

The Federal Reserve is accepting public comments concerning the bank's application. Information concerning how to submit comments appears in the legal notice in today's classified section.